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CoolCo revealed the new charter in its second-quarter results report on Thursday.
The company said it has secured a one-year time charter agreement for a TFDE vessel starting in the third quarter of this year with an “energy major”.
“CoolCo navigated the flat chartering market since our last reporting through a back-to-back 12-month charter that increased its backlog to $1.8 billion,” CEO Richard Tyrrell said.
Tyrrell said during the earnings call later on Thursday that the vessel in question is the 2014-built 160,000-cbm, Kool Blizzard.
He said the vessel made $55,000 per day in the first half of the year, and will now make “around $10,000 more” on this new 12-month charter.
CoolCo has seven TFDE LNG carriers it acquired from Golar LNG and the four LNG carriers it purchased from its largest shareholder Eastern Pacific Shipping.
It also manages two vessels owned by other companies, according to its website.
Second LNG newbuild
In May, CoolCo has entered into a 14-year charter deal with India’s largest gas utility GAIL for one of the company’s two 174,000-cbm newbuild LNG carriers currently under construction in South Korea.
CoolCo will deliver the newbuild to state-owned GAIL in the Gulf of Mexico, with the time charter starting in early 2025.
Tyrrell revealed more details about this charter during the company’s first quarter results earnings call on May 22, saying this is the largest single contract CoolCo has ever entered into.
This LNG carrier will be named Kool Tiger and its sister vessel will be named Kool Panther.
CoolCo purchased these vessels from EPS, and they feature GTT’s Mark III Flex membrane cargo tank system, reliquification, air-lubrication, and shaft generators.
The shipping firm exercised its option with affiliates of EPS Ventures in June 2023 to acquire newbuild contracts for the two 2-stroke LNG carriers scheduled to deliver in the fourth quarter of 2024.
CoolCo said in the results report on Thursday that the company is “participating in two formal processes for Kool Tiger.”
“The chartering of one of CoolCo’s two newbuilds sets a strong foundation for the second newbuild and CoolCo continues to be in discussions with potential charterers regarding its employment of its other newbuild vessel, which is part of two formal bidding processes,” it said.
CoolCo is also developing leads for its other vessel redelivering late in the second half of 2024, it said.
Drydocks
“During Q2 and the early part of Q3, CoolCo has taken advantage of the seasonally quieter months to complete drydocks and secure additional forward charter cover for both the relative short term and the long term,” Tyrrell said in the report.
CoolCo completed its first drydock in the second quarter in 43 days and subsequently finished two more drydocks in the third quarter, taking 21 and 20 days respectively.
The 160,000-cbm, Kool Crystal, went into drydock in early May, while the 160,000-cbm Kool Frost entered the yard for its drydock towards the end of the quarter.
The average cost of these drydocks is estimated to be about $5.5 million per vessel.
Also, the last drydock scheduled for this year will also include the upgrade of a vessel to LNGe specification through the retrofit of a sub-cooler with high liquefaction capacity and other performance enhancements at an estimated cost of an additional $15 million and an additional 20 days off-hire, the company said.
Results
CoolCo generated total operating revenues of $83.4 million in the second quarter, compared to $88.1 million for the first quarter of 2024.
The drop was primarily related to a drawn-out drydock, lower rates on CoolCo’s single variable charter and lower vessel management fees as contracts came to an end, partly offset by two vessels rolling over to higher rates, the firm said.
Net income of $26.51 million in the second quarter decreased compared to $36.81 million for the first quarter with the decrease primarily related to a reduced unrealized gain on CoolCo’s mark-to-market interest rate swaps.
CoolCo achieved average time charter equivalent earnings (TCE ) of $78,400 per day for the second quarter, compared to $77,200 per day for the first quarter, supported by full quarter contributions from two vessels that recently started higher rate charters, the company said.
“Despite the continuing market volatility, geopolitical uncertainty and focus on energy security that continues to figure prominently in the LNG market, several charterers are adopting short shipping strategies that have the potential to spur sudden demand,” Tyrrell said.
“Meanwhile, high gas inventories in Europe are increasingly driving LNG shipments longer haul to a diverse set of Asian markets, supporting ton-mile demand and causing the global LNG carrier fleet to be underrepresented in the Atlantic Basin ahead of the winter market,” he said.
Fleet “largely fixed” through the medium term
Tyrrell said the company looks forward to taking delivery of its two newbuilds later this year, one of which has already secured a 14-year time charter to service the fast-growing Indian LNG market.
“Following our recent chartering activity, our fleet is now largely fixed through the medium term,” he said.
“We are focused on securing additional coverage for our limited charter market exposure in 2024-25, while maintaining the flexibility to benefit from the substantial market tightening we anticipate as vast new LNG volumes come online in 2025-26,” he said.
“Due to full charter coverage and improved drydock performance, we expect a moderate increase in TCE rate and time and charter voyage revenues for the third quarter compared to the second quarter,” Tyrrell added.